In view of existing doubts within the mining sector concerning the scope of work included in the initial exploration phase, the Ministry of Mines issued Ministerial Decree No. 2018-0034 on June 28, 2018, amending the “Instructions for Exploration and Exploitation of Mining Concessions, and Negotiation and Execution of Mining Exploitation Contracts” (the “Instructions”). Drilling had not been allowed within the initial exploration period, due to a limitation in the existent regulations; this has limited the capacity of companies to obtain geological information.

The Decree modifies Chapter I of the Instructions “Scope and Definitions”. In the mining framework, this change reflects the technical opinion of the Mining Regulation and Control Agency (“ARCOM” by its Spanish initials) issued with memorandum ARCOM-C-CR-2018-0142-ME dated May 3, 2018, which states that drilling is an activity corresponding to the initial exploration period: “Test drilling or surveys take place during initial exploration; in accordance with the results obtained during test surveys, investigation probes continue, that is, the drilling  grid (investigation) is narrowed into outstep exploration for the delimitation and form of the mining deposit…”

 

These are the relevant changes:

1.- New technical definitions and regulations concerning exploration drilling. Exploration shafts are those drilled with different inclinations and dimensions, and belong to the initial exploration period.  They are drilled with portable or aerial equipment from platforms of no more than 10 meters per side, a drilling water recirculation system, and biodegradable drilling additives.

2.- Scout drilling is allowed during initial exploration. In the initial exploration period, the Instructions permit test wells or scout drilling, and determine a maximum 40 platforms per each mining concession. It is not necessary to request moving to the outstep exploration phase for that kind of work.

These amendments may eventually result in a possible change and update of the Environmental Mining Regulations.

Warning: This newsletter by Pérez Bustamante & Ponce is not and cannot be used as legal advice or opinion since it is merely of an informative nature.